lululemon athletica Is Playing Offense

lululemon athletica Is Playing Offense

In the first quarter, lululemon athletica (NASDAQ: LULU) continued to experience low traffic, which has plagued a lot of brick-and-mortar retailers lately. But there were some positive signs -- such as higher gross margin, strong customer response to new products, and strong growth in international markets -- that should be encouraging to investors.

While stores have struggled with low traffic, Lululemon has made up for it with higher product margin and higher average retail prices. Excluding costs associated with the restructuring of the ivivva business, adjusted gross margin improved 210 basis points year over year to 50.4% in the first quarter. For the second quarter, management expects a further increase in adjusted gross margin of 100 basis points as a result of product margin improvements.

Lululemon's Metal Vent Tech men's top. Image source: Lululemon.

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Source: Fool.com